Just Don't Do It†

by
Jeffrey Kaplan and Jeff Milchen

Dissident Voice

April
26, 2003

If
big business hopes to regain the dwindling trust of Americans, claiming the
right to lie is hardly the way to do it.

Yet
Nike Corporation lawyers have advanced just that claim to U.S. Supreme Court
justices in the recently heard case of Nike v. Kasky. They hope the court will
overturn a California Supreme Court decision that denied Nikeís privilege to
"plead the First" (Amendment) when charged with violating state
anti-fraud laws. If ruled on Nikeís behalf, the case could dramatically expand
corporate power while weakening tools that governments employ to limit
corporate influence.

In
the face of increasingly unfavorable publicity in 1996 and 1997, Nike conducted
a public relations blitz to convince people it had cleaned up its
subcontractors' notorious "sweatshops." But Californian Marc Kasky
didnít buy it. He claims Nike was being deceptive about its practices and sued
the corporation under California consumer protection laws. He wants the
estimated profits that Nike gained from that PR campaign to be spent correcting
the record publicly, and seeks no money for himself.

Rather
than attempting to refute Kaskyís charges, Nike instead challenged the
legitimacy of the truth-in-advertising law itself. The corporationís attorneys
argued that because the PR campaign was about more than the companyís practices
and did not promote specific products, that the PR campaign should be
considered fully-protected political speech, not less-protected commercial
speech. To hold Nike liable for false information, they claim, would
unconstitutionally snuff the companyís "speech."

Corporations
already are legally obliged to issue accurate statements to investors. When
companies withhold important information or lie to investors, they can be sued
and the officials involved can be held personally liable. If Nike executives
were to contest the constitutionality of those standards, Wall Street and the
mass media would laugh at them. So why should deception in non-financial
communications be exempted?

Corporate
officials can make mistakes, like predicting that a new product will sell well
or that an upcoming merger will strengthen the company, without fear of being
sued -- as long as they don't intentionally deceive (for example, by concealing
evidence that a product is malfunctioning). This is a reasonable standard that
should be applied to non-financial issues.

But
Nikeís going out of its way to try to legally cement its ability to speak
deceptively. The trouble is that there is no Constitutional justification for
this.

Corporations
should not enjoy the same rights as humans -- the word "corporation"
is entirely absent from the Bill of Rights and Constitution; and for good
reason. People should be held in higher esteem than companies. We have rights
because we exist whether or not we create governments.

Corporations,
on the other hand, are creations of the state and have privileges, not rights.
The privileges of incorporation, such as unlimited lifespan and limited
liability, permit corporations to amass power far beyond what an individual can
attain.

So
some counterbalances to the excesses of corporations are necessary. Without
such controls corporations can threaten the functioning of democracies, like
the way they already dominate many ballot initiatives. If the Supreme Court
rules that corporations can enjoy fully protected political rights, it would
rapidly erode the already weakened powers of democratic governments and their
citizenries.

Another
reason for limiting corporate "freedom" is that corporations can and
do use their privileges to harm people in the interests of profit. For years,
tobacco company officials claimed -- even in testimony before Congress -- that
smoking wasn't a serious health risk. As it turned out, they were blatantly
lying, but thankfully theyíve gotten hammered with massive class-action suits.
If the Court rules for Nike, kiss that accountability goodbye.

Nikeís
lawyers have tried to frame the debate as if the company has been sued for
misleading people about broader issues of economic globalization. But the
deceptions Kasky accuses Nike of regard verifiable statements about production
practices.

Corporations
need not be held to perfect accuracy, but they must be held accountable to the
high standards of truth we as citizens should expect from corporations --
especially because, again, corporations are nothing more than legal entities
created by (and regulated by) our governments. Businesses should earn the
publicís trust by showing the same respect for everyone that it does (usually)
for investors.

Thatís
why the Supreme Court should reject the extreme judicial activism Nike is
encouraging and make it clear that the Bill of Rights was written to protect
human liberty, not to shield corporations from public accountability.

Jeffrey Kaplan and Jeff Milchen are a volunteer
and director, respectively, with ReclaimDemocracy.org, an organization working
to restore citizen authority over corporations (www.reclaimdemocracy.org). This article
appeared in TomPaine.com (www.tompaine.com).
††